Novartis ($NVS) can't catch a break with its troubled U.S. OTC plant that has been a source of frustration for CEO Joseph Jimenez. The Swiss drugmaker has recalled 4.4 million bottles of its popular Maalox products due to manufacturing problems that predate Jimenez's recent decision to strip the facility down to the most basic operations.
|Novartis CEO Joseph Jimenez|
Several weeks ago, Novartis began recalling the Maalox products from the U.S. and Canada because of packaging issues. The recall encompasses 9 different types of its Maalox chewable tablets, including more than 3.4 million bottles of Maalox Advanced Maximum Strength Antacid & Antigas. According to the most recent FDA Enforcement report, the bottles may be missing a lot number or expiration date, or those identifiers may be illegible on the outer plastic bottle packaging.
A Novartis spokeswoman said in an email that "the Maalox products being recalled were manufactured at the Novartis Consumer Health manufacturing facility in Lincoln, NE, before December 2011."
The plant, which had closed for remediation, is again shipping products. "We are restarting the plant on a line-by-line, product-by-product basis, taking the necessary time to validate all new processes to ensure control and adherence to a high standard of quality." She said the plant resumed shipping Novartis' Sentinel animal health product in April. The company also has had contractors making Excedrin, Lamisil AT and Triaminic, as well as most recently Benefiber, which began shipping to U.S. customers in late June 2013, she said.
The Lincoln facility has been Novartis' key OTC manufacturing plant, producing its entire Excedrin line, as well as NoDoz, Bufferin and Gas-X Prevention products. It also made some branded drugs for other companies. FDA inspectors in 2011 wrote up a long list of problems, and Novartis found itself removing millions of bottles of its popular OTC brands from retail shelves. That undercut its revenues last year, even as the company was investing in the plant to make improvements. As the remediation dragged on, Jimenez decided this year that the best thing to do was to "simplify the Lincoln manufacturing plant." He said it would focus on just two product forms--solid and powder. The move meant laying off 300 workers and taking a $100 million hit for the restructuring.
Lincoln's loss was Switzerland's gain. The company reversed course on its planned closure of an OTC plant in Prangins. It plans to invest €60 million ($78.6 million) to modernize the plant and expand it. Novartis intends to invest another €90 million ($118 million) by 2020, with plans to boost its capacity by 70% in the next 10 years to build its OTC business.
- here's the FDA report